It’s Time To Talk About Compensation and Record Inflation
It’s no secret that the labor market is in a tight spot right now. Unemployment is at a record low, and companies are struggling to find qualified workers. To further complicate things, inflation has hit the highest rate since the early 1980s.
In response, many companies are starting to raise wages in order to attract and retain employees — and many new employees are holding out for wages that significantly deviate from those of the past.
Minor inflation is believed by economists to actually stimulate growth as a natural byproduct of a strong economy, but when inflation is reaching 8.4% and climbing (compared to 2020’s average rate of 1.24%), consumers — including your potential labor pool — is left struggling with higher prices at the checkout line, the gas pump, and beyond.
This struggle lands on your desk as soon as you begin to interview, and many candidates are looking for employers who will offer them not only a competitive wage, but also one that protects them against future inflation.
Tactics For Weighing Compensation Against Inflation
Employers and Employees are both impacted by inflation, but here are some ways that companies are managing employee compensation amid record inflation. I’m curious what you think and hope you’ll add to the conversation
Bigger Bonuses and a Standard 3% Raise
Some companies are offering bigger year end bonuses in lieu of giving bigger raises. It’s one way that companies can give temporary financial support to their employees without impacting the long term payroll structure.
Graduated Salary Increases
Another way that companies are managing employee compensation is by giving multiple salary increases over the course of a year, rather than one large raise all at once. This allows companies to budget for the raises and spread out the impact on their bottom line while still meeting their employees’ needs.
Hybrid or Remote Work Arrangements
In order to attract workers who may be hesitant to commit to a full-time job, companies are starting to offer more flexible work arrangements. This could include things like working from home, flexible hours, or part-time work.
Before Covid, many employers believed that hybrid or fully-remote workers were not as dedicated as on-site employees, but the past 2+ years have shown that this option is in high demand across industries.
Curious what you think…..hop into this poll and cast a vote!